No full-text available
To read the full-text of this research,
you can request a copy directly from the authors.
Zur Wirkung von Neukunden-Promotions auf Bestandskunden
Abstract
Neukundenverträge werden häufig mit wesentlich attraktiveren Konditionen ausgestaltet als Vertragsangebote für Bestandskunden. Dabei scheinen Neukunden-Promotions zwar grundsätzlich geeignet, die Kaufbereitschaft potenzieller Kunden zu steigern, eventuelle Reaktionen der davon ausgeschlossenen Bestandskunden hierauf finden in der Praxis wie in der wissenschaftlichen Forschung jedoch kaum Beachtung. Vor diesem Hintergrund untersucht die vorliegende Studie anhand von zwei Laborexperimenten die Auswirkungen von Neukunden-Promotions auf potenzielle Kunden und Bestandskunden. Die Ergebnisse des ersten Experiments zeigen, dass Promotions bei potenziellen Kunden zu den gewünschten positiven Veränderungen der Kaufbereitschaft führen. Bei Bestandskunden dagegen sind negative Effekte zu beobachten, die insbesondere dann stark ausgeprägt sind, wenn Kunden erst seit kurzem in einer Kundenbeziehung mit ihrem Anbieter bzw. kurz vor Auslaufen ihres aktuellen Vertrags stehen. Das zweite Experiment belegt, dass die negativen Wirkungen auf die Bestandskunden vermieden werden können, wenn diesen die Möglichkeit geboten wird, durch eine Weiterempfehlungsprämie an der Neukunden-Promotion zu partizipieren. Dabei bleibt die positive Wirkung der Promotion auf die potenziellen Kunden weiterhin bestehen.
Das effiziente Management von Kundenbeziehungen stellt für Dienstleistungsanbieter eine große Herausforderung dar. Der vorliegende Beitrag liefert einen Überblick der Ergebnisse des Forschungsprojekts INTER|CYCLE, in dem Optimierungspotenziale in der Interaktion mit Kunden entlang des Kundenlebenszyklus untersucht wurden. Für die Phasen der Neukundenakquisition, des Erhalts und Ausbaus von Kundenbeziehungen sowie der Reaktivierung und Rückgewinnung von Kunden wurden Studien durchgeführt, deren Ergebnisse Methoden und Stellhebel aufzeigen, wie Dienstleister Kundenbeziehungen effektiv und gleichermaßen effizient gestalten können. Ausgehend von den Projektergebnissen werden weitere Herausforderungen für das Management und Controlling von Kundenbeziehungen identifiziert.
Many companies consider investments in complaint handling as means of increasing customer commitment and building customer loyalty. Firms are not well informed, however, on how to deal successfully with service failures or the impact of complaint handling strategies. In this study, the authors find that a majority of complaining customers were dissatisfied with recent complaint handling experiences. Using justice theory, the authors also demonstrate that customers evaluate complaint incidents in terms of the outcomes they receive, the procedures used to arrive at the outcomes, and the nature of the interpersonal treatment during the process. In turn, the authors develop and test competing hypotheses regarding the interplay between satisfaction with complaint handling and prior experi- ence in shaping customer trust and commitment. The results support a quasi "brand equity" perspective—whereas satisfaction with complaint handling has a direct impact on trust and commitment, prior positive experiences miti- gate, to a limited extent, the effects of poor complaint handling. Implications for managers and scholars are discussed.
The authors present a unified strategic framework that enables competing marketing strategy options to be traded off on the basis of projected financial return, which is operationalized as the change in a firm's customer equity rel- ative to the incremental expenditure necessary to produce the change. The change in the firm's customer equity is the change in its current and future customers' lifetime values, summed across all customers in the industry. Each customer's lifetime value results from the frequency of category purchases, average quantity of purchase, and brand-switching patterns combined with the firm's contribution margin. The brand-switching matrix can be esti- mated from either longitudinal panel data or cross-sectional survey data, using a logit choice model. Firms can ana- lyze drivers that have the greatest impact, compare the drivers' performance with that of competitors' drivers, and project return on investment from improvements in the drivers. To demonstrate how the approach can be imple- mented in a specific corporate setting and to show the methods used to test and validate the model, the authors illustrate a detailed application of the approach by using data from the airline industry. Their framework enables what-if evaluation of marketing return on investment, which can include such criteria as return on quality, return on advertising, return on loyalty programs, and even return on corporate citizenship, given a particular shift in cus- tomer perceptions. This enables the firm to focus marketing efforts on strategic initiatives that generate the great- est return.
Increased access to individual customers and their purchase histories has led to a growth in targeted promotions, including the practice of offering different pricing policies to prospective, as opposed to current, customers. Prior research on targeted promotions has adopted a tenet of the standard economic theory of choice, whereby what a consumer chooses depends exclusively on the prices available to that consumer. In this article, the authors propose that consumer preference for firms is affected not just by prices the consumers themselves are offered but also by prices available to others. This departure from the conventional strong-rationality approach to targeted promotion results in a decidedly different optimal policy. Through a laboratory experiment, calibration of a stochastic model, and game-theoretic analysis, the authors demonstrate that ignoring behaviorist effects exaggerates the importance of targeting switchers as opposed to loyals. This occurs, though with intriguing differences, even when only part of the market is aware of firms' differing promotional policies. The authors show that both the deal percentage and the proportion of aware consumers affect the optimal strategy of the firm. Furthermore, the authors find that offering lower prices to switchers may not be a sustainable practice in the long run, as information spreads and the proportion of aware consumers grows. The model cautions practitioners against overpromoting and/or promoting to the wrong segment and suggests avenues for improving the effectiveness of targeted promotional policies.
Using two studies, the author examines the influence of the inferred motive for a firm's price increase on perceptions of price unfairness. Prior to the research presented here, the only established causal antecedent of perceived price unfairness was increased relative profit. In Study 1,the author extends the existing research by demonstrating that the inferred motive, as well as inferred relative profit, provides causal explanation of perceived price unfairness. When participants inferred that the firm had a negative motive for a price increase, the increase was perceived as significantly less fair than the same increase when participants inferred that the firm had a positive motive. In addition, the author shows in Study 2 that the firm's reputation can influence the inferred motive, thereby altering perceptions of price unfairness. Specifically, participants sometimes gave a firm with a good reputation the benefit of the doubt when inferring motive. If the "good" firm did not profit from the price increase, participants inferred significantly more positive motives than if it did profit. The firm with a poor reputation did not receive this benefit; inferred motive was equally negative regardless of whether the firm profited from the price increase. Together, these studies provide evidence that consumer inferences of the motive for a price increase influence the perceived fairness of the increase. Furthermore, reputation is shown to moderate the effect of inferred relative profit on inferred motive. Finally, analyses show that perceived unfairness leads to lower shopping intentions and demonstrate that perceived unfairness mediates the effects of inferred motive and relative price on consumers' shopping intentions.
The authors examine the effect of relational constructs (e.g., satisfaction, trust, and affective and calculative commitment) on customer referrals and the number of services purchased, as well as the moderating effect of age of the relationship on these relationships. The research reported, based on data obtained from a large sample of customers of an insurance company, combines archival and survey data. The results provide evidence that supports the moderating effect of relationship age on the relationship between satisfaction, affective and calculative commitment, and the number of services purchased.
Because referral reward programs reward existing customers and build the customer base, firms use them to encourage customers to make recommendations to others. The authors report on four experiments in which they find that rewards increase referral likelihood. More specifically, they find that rewards are particularly effective in increasing referral to weak ties and for weaker brands. It is also important who receives the reward. Overall, for weak ties and weaker brands, giving a reward to the provider of the recommendation is important. For strong ties and stronger brands, providing at least some of the reward to the receiver of the referral seems to be more effective. The authors discuss the implications of the results for the design of reward programs.
This research examines the benefits customers receive as a result of engaging in long-term relational exchanges with service
firms. Findings from two studies indicate that consumer relational benefits can be categorized into three distinct benefit
types: confidence, social, and special treatment benefits. Confidence benefits are received more and rated as more important
than the other relational benefits by consumers, followed by social and special treatment benefits, respectively. Responses
segmented by type of service business show a consistent pattern with respect to customer rankings of benefit importance. Management
implications for relational strategies and future research implications of the findings are discussed.
The main objective of customer satisfaction programs is to increase customer retention rates. In explaining the link between customer satisfaction and loyalty, switching costs play an important role and provide useful insight. For example, the presence of switching costs can mean that some seemingly loyal customers are actually dissatisfied but do not defect because of high switching costs. Thus, the level of switching costs moderates the link between satisfaction and loyalty. The purposes of this paper are: to examine the moderating role of switching costs in the customer satisfaction-loyalty link; and to identify customer segments and then analyze the heterogeneity in the satisfaction-loyalty link among the different segments. An empirical example based on the mobile phone service market in France indicates support for the moderating role of switching costs. Managerial implications of the results are discussed.
A theory of social inequity, with special consideration given to wage inequities is presented. A special case of Festinger's cognitive dissonance, the theory specifies the conditions under which inequity will arise and the means by which it may be reduced or eliminated. Observational field studies supporting the theory and laboratory experiments designed to test certain aspects of it are described. (20 ref.) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
In this research, the authors present a modeling framework for balancing resources between customer acquisition efforts and customer retention efforts. The key question that the framework addresses is, "What is the customer profitability maximizing balance?" In addition, they answer questions about how much marketing spending to allo-cate to customer acquisition and retention and how to distribute those allocations across communication channels.
Recent news coverage on pricing portrays the importance of price fairness. This article conceptually integrates the theoretical foundations of fairness perceptions and summarizes empirical findings on price fairness. The authors identify research issues and gaps in existing knowledge on buyers' perceptions of price fairness. The article con-cludes with guidelines for managerial practice.. Jennifer L. Cox is Associate Brand Man-ager, John Deere Worldwide Commercial & Consumer Equipment (e-mail: CoxJenniferL@JohnDeere.com). The authors gratefully acknowl-edge the support of the anonymous JM reviewers for their helpful sugges-tions and for their support during the development of this article. T he issue of price fairness has become newsworthy as concerns about gasoline prices, prescription drug prices, physicians' retainer fees, smart vending machines, hidden fees and charges, or Amazon.com's dynamic pricing test have become public knowledge. The uproar that occurred when an Amazon.com customer dis-covered that the price of same-title DVDs differed across purchase occasions was a public relations nightmare for the firm (Adamy 2000). This example shows that both the price offered and the rationale for offering a certain price may lead to perceptions of price unfairness. Perceptions of price unfairness may lead to negative consequences for the seller, including buyers leaving the exchange relationship, spread-ing negative information, or engaging in other behaviors that damage the seller (e.g., Campbell 1999). Why do consumers at times believe that they are being treated unfairly? Given increasing public concern, it seems appropriate to explore further the theoretical bases and empirical findings to clarify what is known about the causes of perceived price unfairness and how the perceptions influ-ence customers' behaviors. Various conceptualizations have been developed and adapted to explain the phenomenon of fairness. However, each approach tends to address a specific reason for price fairness. For example, the dual entitlement principle emphasizes the influence of supply and demand changes and the sellers' profit orientation (Kahneman, Knetsch, and Thaler 1986b). Equity theory and distributive justice emphasize the importance of equality of outcomes between two parties in an exchange (Adams 1965; Homans 1961). In contrast, procedural justice focuses on the influ-ence of the underlying procedures used to determine the outcomes on fairness perceptions (Thibaut and Walker 1975). In this article, we present a conceptual framework for price fairness that integrates the conceptualizations and organizes existing price fairness research. We then use the framework to identify gaps in existing research and to offer guidance for further research. As we proceed, we develop a set of propositions for new research. We conclude with some practical prescriptions for pricing managers.
Service churn and retention rates remain central as constructs in marketing activities, such as valuation of service subscribers and resource allocation. Although extant approaches have been proposed to relate service churn to external factors, such as reported satisfaction, marketing-mix activities, and so on, managers often face situations in which the only information available is the duration for which subscribers have had service. In such cases, can they forecast service churn and understand the contributing factors, which may allow for subsequent intervention? The authors propose a framework to examine factors that may underlie service retention in a contractual setting. Specifically, they use a model of retention that accounts for (1) duration dependence, (2) promotional effects, (3) subscriber heterogeneity, (4) cross-cohort effects, and (5) calendar-time effects (e.g., seasonality). Then, they apply the framework to subscription databases of seven services offered by a telecommunications provider, mirroring the format commonly used to forecast future service churn (and to make managerial decisions). Across all seven services, the inclusion of promotional effects always improves the forecast accuracy of retention behavior, whereas including cross-cohort effects does not significantly improve it. In five of the services, customer heterogeneity, calendar-time effects, and duration dependence also contribute to improved forecasts. The authors use these results to understand how the expected value of a subscription differs across model specifications. They find considerable variation across model specifications, indicating that model misspecification can affect resource allocation decisions and other marketing efforts that are important to a firm., The Wharton School, University of Pennsylvania. The authors express their appreciation to the anonymous firm that gra-ciously provided the data used herein.
Sellers who plan to capitalize on the lifetime value of customers need to manage the sales potential from customer referrals proactively. To encourage existing customers to generate referrals, a seller can offer exceptional value to current customers through either excellent quality or a very attractive price. Rewards to customers for referring other customers can also encourage referrals. We investigate when referral rewards should be offered to motivate referrals and derive the optimal combination of reward and price that will lead to the most profitable referrals.
We define a delighted customer as one who obtains a positive level of surplus above a threshold level and, consequently, recommends the product to another customer. We show that the use of referral rewards depends on how demanding consumers are before they are willing to recommend (i.e., on the delight threshold level). The optimal mix of price and referral reward falls into three regions: (1) When customers are easy to delight, the optimal strategy is to lower the price below that of a seller who ignores the referral effect but not to offer rewards. (2) In an intermediate level of customer delight threshold, a seller should use a reward to complement a low-price strategy. As the delight threshold gets higher in this region, price should be higher and the rewards should be raised. (3) When the delight threshold is even higher, the seller should forsake the referral strategy all together. No rewards should be given, and price reverts back to that of a seller who ignores referrals. These results are consistent with the fact that referral rewards are not offered in all markets.
Our analysis highlights the differences between lowering price and offering rewards as tools to motivate referrals. Lowering price is attractive because the seller “kills two birds with one stone”: a lower price increases the probability of an initial purchase and the likelihood of referral. Unfortunately, a low price also creates a “free-riding” problem, because some customers benefit from the low price but do not refer other customers. Free riding becomes more severe with an increasing delight threshold; therefore, motivating referrals through low price is less attractive at high threshold levels. A referral reward helps to alleviate this problem, because of its “pay for performance” incentive (only actual referrals are rewarded.) Unfortunately, rewards can sometimes be given to customers who would have recommended anyway, causing a waste of company resources. The lower the delight threshold level, the bigger the waste and, therefore, motivating referrals through rewards loses attractiveness.
Our theory highlights the advantage of using referral rewards in addition to lowering price to motivate referrals. It explains why referral programs are offered sometimes but not always and provides guidelines to managers on how to set the price and reward optimally.
The financial crisis of 2008, which started with an initially well-defined epicenter focused on mortgage backed securities (MBS), has been cascading into a global economic recession, whose increasing severity and uncertain duration has led and is continuing to lead to massive losses and damage for billions of people. Heavy central bank interventions and government spending programs have been launched worldwide and especially in the USA and Europe, with the hope to unfreeze credit and boltster consumption. Here, we present evidence and articulate a general framework that allows one to diagnose the fundamental cause of the unfolding financial and economic crisis: the accumulation of several bubbles and their interplay and mutual reinforcement has led to an illusion of a ``perpetual money machine'' allowing financial institutions to extract wealth from an unsustainable artificial process. Taking stock of this diagnostic, we conclude that many of the interventions to address the so-called liquidity crisis and to encourage more consumption are ill-advised and even dangerous, given that precautionary reserves were not accumulated in the ``good times'' but that huge liabilities were. The most ``interesting'' present times constitute unique opportunities but also great challenges, for which we offer a few recommendations.
In both dictator and impunity games, one player, the dictator, divides a fixed amount of money between himself and one other, the recipient. Recent lab studies of these games have produced seemingly inconsistent results, reporting substantially divergent amounts of dictator giving. Also, one prominent explanation for some of these differences, the impact of experimenter observation, displayed weak explanatory power in a different but related lab game. Data from the new experiment reported here offers some explanations. We find that dictators determine how much they will give on the basis of the total money available for the entire experimental session, not on the basis of what is available per game. This explains the reported differences between impunity and dictator studies. When distributing a gift among several recipients, individual dictators show little tendency towards equal treatment. Also, we find no evidence for the experimenter observation effect. Comparison with earlier experiments suggests that differences in the context of the game, affected by differences in written directions and independent of experimenter observation, account for differences across dictator studies. We propose a hypothetical decision procedure, based on the notion that dictator giving originates with personal and social rules that effectively constrain self-interested behavior. The procedure provides a link between dictator behavior and a broader class of laboratory phenomena.
Many companies consider investments in complaint handling as means of increasing customer commitment and building customer loyalty. Firms are not well informed, however, on how to deal successfully with service failures or the impact of complaint handling strategies. In this study, the authors find that a majority of complaining customers were dissatisfied with recent complaint handling experiences. Using justice theory, the authors also demonstrate that customers evaluate complaint incidents in terms of the outcomes they receive, the procedures used to arrive at the outcomes, and the nature of the interpersonal treatment during the process. In turn, the authors develop and test competing hypotheses regarding the interplay between satisfaction with complaint handling and prior experience in shaping customer trust and commitment. The results support a quasi “brand equity” perspective—whereas satisfaction with complaint handling has a direct impact on trust and commitment, prior positive experiences mitigate, to a limited extent, the effects of poor complaint handling. Implications for managers and scholars are discussed.
This chapter discusses the effects of inequity on the formation and change of attitudes in interpersonal relations. It presents the comparison of inequity to cognitive dissonance, and discusses the implications of inequity or injustice for attitude formation and change. Inequity is usually assumed to be capable of influencing the attitudes of people toward their positions in a relationship, toward their partners in the relationship, toward the relationship as a whole, toward the tasks they are to perform, and toward the person or agent responsible for the inequity. The existence of perceived inequity is assumed to result in distress. Although derived from dissonance theory, equity theory introduces some important refinements. Equity theory makes a distinction between cognitive elements that represent an individual's inputs into an exchange relationship and elements that represent that individual's outcomes. The chapter discusses the implications of equity theory for influencing behavior in exchange relationships.
The process of exchange is almost continual in human interactions, and appears to have characteristics peculiar to itself, and to generate affect, motivation, and behavior that cannot be predicted unless exchange processes are understood. This chapter describes two major concepts relating to the perception of justice and injustice; the concept of relative deprivation and the complementary concept of relative gratification. All dissatisfaction and low morale are related to a person's suffering injustice in social exchanges. However, a significant portion of cases can be usefully explained by invoking injustice as an explanatory concept. In the theory of inequity, both the antecedents and consequences of perceived injustice have been stated in terms that permit quite specific predictions to be made about the behavior of persons entering social exchanges. Relative deprivation and distributive justice, as theoretical concepts, specify some of the conditions that arouse perceptions of injustice and complementarily, the conditions that lead men to feel that their relations with others are just. The need for much additional research notwithstanding, the theoretical analyses that have been made of injustice in social exchanges should result not only in a better general understanding of the phenomenon, but should lead to a degree of social control not previously possible. The experience of injustice need not be an accepted fact of life.
This article compares eleven different consumer-based brand equity measures and evaluates their convergence. Predictive validity at the individual and aggregate levels is also investigated. Measures based on the dollar metric method and discrete choice methodology predict choices extremely well in a simulated shopping environment, as well as purchase-intention and brand-quality scales.
The effects of the specific emotions disappointment and regret on customers’ behavioral responses to failed service encounters were examined. Study 1, using a vignette methodology, showed that regret was more associated with switching behavior than was disappointment and that disappointment was more associated with word of mouth and complaining than was regret. These results were largely replicated in Study 2, in which each customer was asked to report an autobiographical episode in which he or she experienced dissatisfaction with a service. Characteristics of this experience, as well as regret, disappointment, satisfaction, and behavioral responses, were assessed. As hypothesized, regret had a direct effect on customers’ switching, over and above the effect of dissatisfaction. Moreover, disappointment had a direct effect on word of mouth, over and above the effect of dissatisfaction. Finally, neither regret nor disappointment had a direct effect on the actual complaining in Study 2.
This paper explores some of the issues surrounding the use of internet-base d methodologies, in particular the extent to which data from an online survey can be matched to data from a face-to-face survey. Some hypotheses about what causes differences in data from online panel surveys and nationally representative face-to-face surveys are discussed. These include: interviewer effect and social desirability bias in face-to-face methodologies; the mode effects of online and face-to-face survey methodologies, including how response scales are used; and differences in the profile of online panellists - both demographic and attitudinal. Parallel surveys were conducted using online panel and face-to-face (CAPI) methodologies, and data were compared before weighting, following demographic weighting and following 'propensity score weighting' - a technique developed by Harris Interactive to correct for attitudinal differences typically found in online respondents. This paper looks at the differences in data from online and face-to-face surveys and puts forward some theories about why these differences might exist. The varying degrees of success of the weighting are also examined.
Construct definition, Object classification, Attribute classification, Rater identification, Scale formation, and Enumeration and reporting (C-OAR-SE) is proposed as a new procedure for the development of scales to measure marketing constructs. C-OAR-SE is based on content validity, established by expert agreement after pre-interviews with target raters. In C-OAR-SE, constructs are defined in terms of Object, Attribute, and Rater Entity. The Object classification and Attribute classification steps in C-OAR-SE produce a framework (six types of scales) indicating when to use single-item vs. multiple-item scales and, for multiple-item scales, when to use an index of essential items rather than selecting unidimensional items with a high coefficient alpha. The Rater Entity type largely determines reliability, which is a precision-of-score estimate for a particular application of the scale.
In this article, the authors focus on the concept of relational equity, that is, the customer perception of distributive justice within a continuous customer-provider relationship. The authors investigate the influences of relational equity on attitudinal loyalty and behavioral loyalty. Moreover, they test the hypothesis that relationship age moderates the impact of relational equity on loyalty, adopting a cross-sectional design and data from a sample of Italian customers of mobile phone services (N = 461). Relational equity is recognized as a significant determinant of customer loyalty over and above satisfaction and trust effects, and its influence increases along with relationship age. From a managerial point of view, results suggest that loyalty programs should be tailored according to the age of the relationship. Moreover, particular care should be devoted to monitoring perceived relational equity, especially in longer-term relationships.
For over fifty years researchers have encountered difficulties with least squares estimators when predictor variables in a regression analysis are multicollinear. Extensive research efforts over the last ten to fifteen years have resulted in a clear understanding of many aspects of this problem and have, generated a great deal of controversy over possible solutiors. In this survey the nature and effects of predictor-variable multicollinearities are examined. Emphasis is placed on discussions of the multicollinearity problem itself rather than on classical or Bayesian solutions to the problem.
The calculation of customer value without regard to marketing policy is problematic because the value of managerial flexibility and the impact of consumer learning are neglected. This article develops a structural dynamic programming model of consumer demand that includes marketing variables and consumer expectations of promotions. The author uses the estimated parameters to conduct policy experiments that yield more accurate forecasts of customer value and to study the impact of alternative marketing policies.
In recent decades, many service markets have been liberalized, which means incumbent service firms face new competitors and must address customer switching—which from a public policy perspective, is necessary to ensure that liberalization succeeds. In this article, the authors conduct an exploratory study in which they investigate determinants of customer switching in the liberalizing Dutch energy market. Their results suggest that relationship quality, switching costs, and current demand for products and services from the energy supplier (e.g., usage rate, number of contracts) represent important determinants for all customers. In a subsequent analysis that accounts for customer heterogeneity, the results indicate a large inertia segment (71%) but a relatively small (6%) disloyal segment. The authors discuss implications for both incumbent service firms (former monopolists) and public policy officials.
Many service organizations have embraced relationship marketing with its focus on maximizing customer lifetime value. Recently, there has been considerable controversy about whether there is a link between customer satisfaction and retention. This research question is important to researchers who are attempting to understand how customers' assessments of services influence their subsequent behavior. However, it is equally vital to managers who require a better understanding of the relationship between satisfaction and the duration of the provider-customer relationship to identify specific actions that can increase retention and profitability in the long run. Since there is very little empirical evidence regarding this research question, this study develops and estimates a dynamic model of the duration of provider-customer relationship that focuses on the role of customer satisfaction.
This article models the duration of the customer's relationship with an organization that delivers a continuously provided service, such as utilities, financial services, and telecommunications. In the model, the duration of the provider-customer relationship is postulated to depend on the customer's subjective expected value of the relationship, which he/she updates according to an anchoring and adjustment process. It is hypothesized that cumulative satisfaction serves as an anchor that is updated with new information obtained during service experiences. The model is estimated as a left-truncated, proportional hazards regression with cross-sectional and time series data describing cellular customers perceptions and behavior over a 22-month period.
The results indicate that customer satisfaction ratings elicited prior to any decision to cancel or stay loyal to the provider are positively related to the duration of the relationship. The strength of the relationship between duration times and satisfaction levels depends on the length of customers' prior experience with the organization. Customers who have many months' experience with the organization weigh prior cumulative satisfaction more heavily and new information (relatively) less heavily. The duration of the service provider-customer relationship also depends on whether customers experienced service transactions or failures. The effects of perceived losses arising from transactions or service failures on duration times are directly weighed by prior satisfaction, creating contrast and assimilation effects.
How can service organizations develop longer relationships with customers? Since customers weigh prior cumulative satisfaction heavily, organizations should focus on customers in the early stages of the relationship—if customers' experiences are not satisfactory, the relationship is likely to be very short. There is considerable heterogeneity across customers because some customers have a higher utility for the service than others. However, certain types of service encounters are potential relationship “landmines” because customers are highly sensitive to the costs/losses arising from interactions with service organizations and insensitive to the benefits/gains. Thus, incidence and quality of service encounters can be early indicators of whether an organization's relationship with a customer is flourishing or in jeopardy. Unfortunately, organizations with good prior service levels will suffer more when customers perceive that they have suffered a loss arising from a service encounter—due to the existence of contrast effects. However, experienced customers are less sensitive to such losses because they tend to weigh prior satisfaction levels heavily.
By modeling the duration of the provider-customer relationship, it is possible to predict the revenue impact of service improvements in the same manner as other resource allocation decisions. The calculations in this article show that changes in customer satisfaction can have important financial implications for the organization because lifetime revenues from an individual customer depend on the duration of his/her relationship, as well as the dollar amount of his/her purchases across billing cycles.
Satisfaction levels explain a substantial portion of explained variance in the durations of service provider-customer relationships across customers, comparable to the effect of price. Consequently, it is a popular misconception that organizations that focus on customer satisfaction are failing to manage customer retention. Rather, this article suggests that service organizations should be proactive and learn from customers before they defect by understanding their current satisfaction levels. Managers and researchers may have underestimated the importance of the link between customer satisfaction and retention because the relationship between satisfaction and duration times is very complex and difficult to detect without advanced statistical techniques.
This article reports the development of a theoretical model of consumer complaint behavior by using cognitive appraisal theory
as its foundation. Because of its importance to management and lack of attention in the marketing literature, specific emphasis
is placed on the phenomenon of noncomplaining and the role of consumer emotion in dissatisfying marketplace experiences. The
model presents cognitive appraisal as the key element in the evaluation of consumer threat and harm, which subsequently may
result in psychological stress. Stressful appraisal outcomes are suggested to elicit emotive reactions that, in conjunction
with cognitive appraisal, influence the type of coping strategy used by the consumer. Three coping strategies (problem focused,
emotion focused, and avoidance) are identified and discussed. Key propositions are illustrated by using in-depth interview
data from a sample of older female consumers.
Most of the previous research on price changes has focused on price decreases. This article investigates the effects of price
increases at an individual level. The authors argue that customers’ reactions to price increases (i.e., repurchase intentions)
are strongly driven by two factors: the magnitude of the price increase and the perceived fairness of the motive for the price
increase. In this context, the authors examine the role of customer satisfaction in influencing the impact of these two variables
on repurchase intentions after a price increase. Their findings reveal that as satisfaction increases, the negative impact
of the magnitude of a price increase is weakened. Furthermore, the results suggest that satisfaction moderates the impact
of perceived motive fairness. The authors also find that the level of satisfaction can influence the valence of the perceived
motives in response to a price increase.
Oliver and Shor [2003, Digital redemption of coupons: Satisfying and dissatisfying effects of promotion codes. Journal of Product and Brand Management 12(2), 121–134] provide data suggesting that Web sites prompting customers to enter a “promotion code”, a digital version of the coupon, may unwittingly be losing customers who otherwise would be willing to purchase. They suggest that the act of requesting such a code hints at the existence of price promotions that may be unavailable to the current shopper, potentially diminishing one’s likelihood of purchase. We extend their experiment to address the issue of price discrimination and profitability in this context. Our results demonstrate that this diminished likelihood of purchase has adverse effects on profitability and offsets any gains from market segmentation. Further, we analyze a firm’s ability to deliver coupons to targeted market segments successfully, given the availability of such coupons on multiple Web sites outside of the retailer’s control. We observe that the existence of coupon repositories distorts efficient price discrimination, leading to segmentation of consumers not along dimensions of price sensitivity but of technical competence. These results have managerial implications for those considering online couponing policies.
The past few years have seen increasing interest in taking the notion of customer lifetime value (CLV) and extending it to value a customer base (with subsequent links to corporate valuation). The application of standard textbook discussions of CLV sees us performing such calculations using a single aggregate retention rate. However, at the cohort level, retention rates typically increase over time. We suggest that these observed dynamics are due, in large part, to a sorting effect in a heterogeneous population. We show that failing to recognize these dynamics yields a downward-biased estimate of the residual value of the customer base. We also explore the implications of failing to account for retention dynamics when computing retention elasticities, and find that the frequently reported estimates underestimate the true effect of increases in underlying retention rates in a heterogeneous world.
This study compares the predictive validity of single-item and multiple item measures of attitude toward the ad (AAd) and attitude toward the brand (ABrand), which are two of the most widely measured constructs in marketing. The authors assess the ability of AAd to predict ABrand in copy tests of four print advertisements for diverse new products. There is no difference in the predictive validity of the multiple-item and single-item measures. The authors conclude that for the many constructs in marketing that consist of a concrete singular object and a concrete attribute, such as AAd or ABrand, single-item measures should be used.
Despite a flurry of activities aimed at serving customers better, few companies have systematically revamped their operations with customer loyalty in mind. Instead, most have adopted improvement programs ad hoc, and paybacks haven't materialized. Building a highly loyal customer base must be integral to a company's basic business strategy. Loyalty leaders like MBNA credit cards are successful because they have designed their entire business systems around customer loyalty--a self-reinforcing system in which the company delivers superior value consistently and reinvents cash flows to find and keep high-quality customers and employees. The economic benefits of high customer loyalty are measurable. When a company consistently delivers superior value and wins customer loyalty, market share and revenues go up, and the cost of acquiring new customers goes down. The better economics mean the company can pay workers better, which sets off a whole chain of events. Increased pay boosts employee moral and commitment; as employees stay longer, their productivity goes up and training costs fall; employees' overall job satisfaction, combined with their experience, helps them serve customers better; and customers are then more inclined to stay loyal to the company. Finally, as the best customers and employees become part of the loyalty-based system, competitors are left to survive with less desirable customers and less talented employees. To compete on loyalty, a company must understand the relationships between customer retention and the other parts of the business--and be able to quantify the linkages between loyalty and profits. It involves rethinking and aligning four important aspects of the business: customers, product/service offering, employees, and measurement systems.
Psychological reactance, the theory that people resist attempts to constrain either their thoughts or their behaviors (J. W. Brehm, 1966), has been an influential concept in social psychology. In an attempt to measure reactance, J. Merz (1983) developed the Questionnaire for the Measurement of Psychological Reactance (QMPR). Subsequent researchers (S.-M. Hong & R. Ostini, 1989; R. K. Tucker & P. Y. Byers, 1987) have debated both the exact factor structure and the psychometric stability of the QMPR. In the present study, 898 undergraduates completed the QMPR. Factor analysis suggested that psychological reactance is multidimensional. The authors found 3 factors underlying the QMPR, but the QMPR provided unreliable estimates for each of those factors. According to the results, the QMPR as currently written is psychometrically unsatisfactory.
There are many experimental studies of bargaining behavior, but suprisingly enough nearly no attempt has been made to investigate the so-called ultimatum bargaining behavior experimentally. The special property of ultimatum bargaining games is that on every stage of the bargaining process only one player has to decide and that before the last stage the set of outcomes is already restricted to only two results. To make the ultimatum aspect obvious we concentrated on situations with two players and two stages. In the ‘easy games’ a given amount c has to be distributed among the two players, whereas in the ‘complicated games’ the players have to allocate a bundle of black and white chips with different values for both players. We performed two main experiments for easy games as well as for complicated games. By a special experiment it was investigated how the demands of subjects as player 1 are related to their acceptance decisions as player 2.
Coupons, in the form of promotion codes", are now a mainstay of the online shopping experience, but online coupon redemption differs substantively from that in traditional retailing. Offline redemption of coupons is customer-initiated while Internet shoppers are usually prompted to enter a code towards the conclusion of the checkout process. This prompting may influence shopper perceptions and behaviors such as shopping cart abandonment. Results showed strong negative effects on price fairness, satisfaction, and purchase completion in the code-absent group and positive effects on fairness and satisfaction in the code-present group. Presents implications for effective market segmentation through the use of online coupon codes.
Equity in attitude formation and change (Hrsg) Equity and justice in social behavior
- I Ajzen